What risk does statistical sampling reduce? - ProProfs Discuss
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What risk does statistical sampling reduce?



A. Audit risk
B. Detection risk
C. Inherent risk
D. Sampling risk

This question is part of CISA - Mock Test - Domain 1 (100 Questions)
Asked by Hemangdoshi, Last updated: May 08, 2018

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1 Answer

hemangdoshi

Hemangdoshi

Answered on Dec 04, 2017

B. detection risk

In any given scenario, statistical sampling minimizes the detection risk. Detection risk is the chance that an auditor will not find material misstatements in an entitys financial statements. Detection risk is the risk that the auditor will conclude that no material errors are present when in fact there are. However, using statistical sampling, probability of error can be objectively quantified and hence detection risk can be minimized. Other risks cannot be minimized using statistical sampling.
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